Season 3 Episode 16: Want to Buy Your First Home? Start With a Plan
If buying your first home feels completely out of reach, we recommend stepping away from the property listings and gathering the facts.
The headlines tell us that buying a home is harder than ever. But without understanding the options available, it’s easy to assume home ownership isn’t possible – or put off learning more until you feel “ready”.
In this episode, Mel and Darlene explore why the first-home journey should begin with financial education, a clear plan and a better understanding of what matters to you.
We discuss:
Darlene and Mel’s money truths: supporting their children as they work towards independence – from first jobs and moving away to learning to drive and saving for a car
How the stories we hear about housing affordability can shape our beliefs and behaviour
Why facts can help you move beyond fear, assumptions and financial overwhelm
Why your values, lifestyle and future plans should guide the type of home and loan you choose
How the five per cent deposit scheme could help eligible first-home buyers purchase sooner than they think
The questions to ask a bank or mortgage broker before committing to a loan
Why your first move shouldn’t necessarily be opening realestate.com.au
This week’s TMC Take is that your first-home journey should start with a plan, not a property search. Learning what’s possible gives you the confidence to decide whether buying is right for you, what you’re comfortable spending and which options could support the life you want to create.
You don’t need to have everything figured out before asking questions. Start early, get curious and don’t be afraid to seek another perspective if you aren’t receiving the information you need.
We hope this conversation helps you cut through the noise, explore your options and take the next step in your own time.
ABOUT THE MONEY COLLECTIVE PODCAST
Financial Wellbeing with The Money Collective brings together the stories and insights Darlene Neu and Mel Pearce have gained through working with thousands of Australians and helping them navigate their finances.
With more than 50 years of combined experience in banking and finance, Darlene and Mel break down the barriers we face every day when it comes to money, relationships and family life. It's an honest, no-holds-barred podcast about financial wellbeing and the role money plays in all our lives.
READY TO BEGIN YOUR FINANCIAL WELLBEING JOURNEY?
Get to know your cost of living by listing your expenses using our handy spending review spreadsheet: https://www.themoneycollective.com.au/resources
Book a time to chat with us, ask questions and talk about all things financial wellbeing, home loans and more. Email team@themoneycollective.com.au
Take action and improve your financial wellbeing with our online course: https://www.themoneycollective.com.au/onlinecourse
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Welcome to The Money Collective podcast. We're here to uplift your financial well-being. I’m your host, Mel Pearce and Darlene Neu. We are the co-founders of The Money Collective, and together we have 50 years of finance and banking experience where we provide the tools, information and guidance to better understand your money and feel confident making money decisions. Welcome to another episode of Financial Wellbeing with us.
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Now, do you have a tweet? Yeah. This is the podcast where we talk about money and how we feel about it, and a different take maybe than you had before and how. Yeah, like what? I feel like we just love counselors to unqualified laugh cracks. Definitely. And only through our own experience. Yeah. And listening to you guys as well.
00;00;52;20 - 00;01;17;02
Tell us all your stories. Yeah. But like when you say it's a different take as a money podcast, we are not here talking strategies and investment strategies like you won't hear us talk about it specific, like within. We will talk about investing and growing our financial resilience for our future to give us choices or whatever. But this is not like, I'm sorry, a finance bro podcast.
00;01;17;03 - 00;01;41;17
No, this is not us telling you what to do. It's more so giving you tips on how to feel better when it comes to money. Financial well-being is how we feel and so at the beginning of every podcast, we do love to share a truth because we just will be real about this stuff. And so I just want to share something to get us started today.
00;01;41;17 - 00;02;06;14
And that is the fact that our youngest child is 17 and finishing year 12, and she applied for a job yesterday. Oh, like a full time job? Well, I don't think so. I think it's still casual part time, but it's like at my post school, like I need to get into. I need to get it. Yeah, right. That's it.
00;02;06;14 - 00;02;35;04
Was it Rebel Sport? Hopefully, you know, fingers crossed. Rebel sport, please employ my daughter. That would be great because it's a very aligned, you know, retail job, I think. Yeah, she loves sports and school. She's friends. She's a sports chick. Like she knows and stuff. Anyway, So if you're listening to talking about the people who are vetting those resumes coming through, she'd be a great fit.
00;02;35;04 - 00;02;57;06
Because when your parents advocate for you, it's very helpful, isn't it? Every employee loves what she did. So I didn't tell her to go and do that. She did it over and back. Super happy and proud. And it does make me think, Oh my God, where did the time go? But also, I'm so glad that she's thinking this way.
00;02;57;06 - 00;03;21;23
Like, I can tell that she's thinking about her future. What the next year might look like. What an exciting time. Loftily Yeah. Independence that I think that's what she's going for. Like our oldest son, he is living at home. He's doing a second year capillary apprenticeship. And I think that he will just be steady as he goes. Like he'll like it at home.
00;03;21;23 - 00;03;41;03
He's playing board, he's doing the things going to work. He'll probably say, for house deposit and have three kids. I don't know what surprised you he might have a really surprising reason. He does. Of course, it's so silly, but I can see that too. He wants to go and explore and she's like, Mom, don't say this again.
00;03;41;03 - 00;04;16;00
It feels like you're trying to push me out. And I'm like, But then she says things like, I need a car so I can travel and I need a car so that I can sleep in it. And I'm like, Well, there's the signs. So I can see that that's going to be her little next adventure. And I'm excited for her and I'm excited for me because I can see her independence like I'm not kicking her anyone out the but here with the goals and plans and it's nice to I really enjoy seeing your kids make their own plans.
00;04;16;00 - 00;04;38;16
And again, I think it's not wedded to any outcome. It's actually just the exploration. Yeah, I really love that. I love when they doing things and trial and error, right? That's just trial and error everything we do so, you know, finding what you like, what you don't like. Yeah. And actually just having a crack. I love it.
00;04;38;16 - 00;04;56;21
Yeah. Yeah. Good on you, too. And I think for me personally, that is probably what I hope. So then like, I know it's not nothing's come. We don't know what's around any corner in life or whatever, but I would have hoped that, you know, they had some of these aspirations and I can see ourselves starting and I like that.
00;04;56;23 - 00;05;20;07
I do too. Yeah. It's really interesting. Something that you said resonated with me with Amos. He's 25 now, so we got over that, but he you know, that courage that we really want them to have, right? We want them to make courageous decisions. I don't actually care what they do as long as they're being courageous, having a crack at whatever life, you know, because life, you might as well live it.
00;05;20;07 - 00;05;42;01
You know, That's simple as that. Really? Yeah. But I think sometimes, you know, Do they need a little push? This is a really fascinating one. So our son's 25. He was at, you know, finished by 12 and then COVID hit, you know, and really, you know, struggled through for a few years around, you know, what do I do?
00;05;42;02 - 00;05;59;04
You know, again, what do you do? You know? So he worked for me. He tried a couple of different things, which was great. I didn't like them, you know, through Lean went to Europe for a bit, which is, you know, good on him. I loved that he actually did that. Like he took action. Yeah. And he said, This isn't for me.
00;05;59;06 - 00;06;23;00
And then he went and then he came home and he was debating whether to go to Universal not or go overseas and go to uni. And so what he did was apply. So he decided on the course that he wanted to do and he applied, looked for the courses that he liked at universities all over Australia and he applied for three tours in Western Australia actually, one was in Canberra and one was in Sydney.
00;06;23;03 - 00;06;45;26
Yes, he didn't get the one in Canberra which is, again. Yeah. I got accepted to the other three. That's for a reason. That's interesting. Anyway he accepted the one in Sydney, but you could tell his heart was not in it as much and I was like I had to push him out the door and he said to me, You just don't want me here anymore.
00;06;45;27 - 00;07;09;22
That's what you were saying. Yeah. And I just broke my heart. Yeah. I just want them to enjoy their life. Don't stay here with me. Boring. What? What are you going to do? Sit with me? Well, wait. Do everything Cook does. So. Yeah. So a counsellor who places you just needs to go and explore. Otherwise you're not going to go and do anything.
00;07;09;22 - 00;07;26;13
And what you're going to, you know, in Logan sense, you know, game all day and stay in your room and life be done to you. We talked, you know, we talk a lot about being in the driver's seat. This is life being done to you. Yeah. Yeah. So, I mean, I don't regret giving him a push. Yeah, but does he ever.
00;07;26;13 - 00;07;48;00
Thank you for that. His. Hey, do you get a lot of team-mates come back. Come on. I'm going to ask you. He has thanked us for other things. It is felt really good around giving, you know, more experiences to see different elements of the world. So, yeah, maybe I'll ask him. But, you know it was it was true their lives up now.
00;07;48;02 - 00;08;15;05
Well mostly we do a good job they take us for they Well you think of your own money story. Yeah we definitely Yeah. Screw their lives up. But yeah, so. Yeah, but it was hard conversation at the time I had. How do you get them? Well, you know, how do you approach that? How do you, you know, say I guess say these sort of things like no, I relate to that.
00;08;15;05 - 00;08;33;16
Like the pushing out because like I've talked about in previous episodes that we like what he saved up for a car, I'm sorry. And he was like, Super. Actually, I haven't given an update on this. So he bought the car. He was super excited and we were so proud of him. And always I did an episode where I'm like, Oh my God, I'm so proud.
00;08;33;16 - 00;09;05;26
He saved all this money. Like, Oh my God. And then it frickin blew up like, that whole engine. He bought these, like, you know, the fancy car, the try to you, you know, like, you know, when you see people is driving the fancy try to use and your how did they do like what I like you know I had a beat up hatchback anyway so anyway he got done in this you know whatever And then where am I going with this.
00;09;05;26 - 00;09;25;04
Oh yeah. So, he's had to save, I guess, in like another $13,000 to fix this car. Right. And that stuff. Right. So he's saved up the first 25,000 to buy the car, then he's had to do another 13 and and decide, am I just going to offload this car, get start again or am I going to put the money into it?
00;09;25;07 - 00;09;46;15
And so he's sitting back, right? Resilience building this whole time. And we're like, and he's made the decision and he's sourced the new motor. He knows who's going to fix it. But he was still sitting back and not doing it. And so like person has been he's been like he's been doing the push Yeah, the kick up the back like, are you going to put this in something to do it up about dying?
00;09;46;16 - 00;10;03;09
Because it's like his I can see him. He's like, I've saved up all the money again. I don't. I'll be broke again. Yes. It's all my money's going to be gone again. So it's the holding on to it. But then the kick up the but at least you have a car to drive. Yeah, yeah, yeah. Well, it does.
00;10;03;10 - 00;10;28;19
It does. When we have to do hard things, it teaches us a lot to talk about, you know, success in failure, but in failure, it's so true. We need to do all that. We need to go through that to come out the other side. Yes. Yeah, Yeah, I know. But it was interesting to see how that works out and how it plans that, you know, having wheels and independence is a massive part, right?
00;10;28;20 - 00;10;53;11
Yeah. Which brings you to my truth, which is Canadian, actually. So Lily is 15. I'm talking about her regularly. She is 16 in April, and she is very much wanting to learn to drive. Yeah, which is fine. So, you know, she learned to drive. So we got two years. She already is pushing people like in a car. Are you going to give me one?
00;10;53;11 - 00;11;15;22
Oh, yeah. Oh, these girls swear and I've because I've said no. Right. You would. I've talked about the journey of giving kids cars, whether it's days or not. And so we had an old car we gave to our son. Just really briefly at that age, I reckon it's the worst thing we ever did. And it didn't help his self-esteem and the validation because you can do lies.
00;11;15;22 - 00;11;32;22
Let me fill in the blanks here, because you were going heavy service. Have you looked after it? Why is it broken down again? Why don't you wash it? And because you hadn't transferred the radio? Everything. It was like, whose responsibility is this car? So he's feeling like, Oh, this is your car. And then you're saying it's your car, right?
00;11;32;24 - 00;11;53;01
So we were right through the process right now of transferring Oh, to him. I don't have to say it. Not our car. And there was a real, you know, strong epiphany when the four of us slowly included. We were sitting around and actually when we're in Europe last year and I was talking about driving. So this has been a deal for her learning how to drive, getting our own car.
00;11;53;04 - 00;12;16;19
Yeah. And he said to her like and said, don't worry, you can have the Honda and that says he doesn't believe the car is his. Yes right so that was the clarity. He does not believe the car as he's using it paints some expenses on it but not his. Yeah. Because he didn't buy it yet. It's not in his name so.
00;12;16;22 - 00;12;35;05
Yep. So we are moving that across. He can do whatever he likes. So he's getting the car. Yeah. Even though. Does he want it. Well Lily says I don't want to drive it. I'm not driving that car. Yeah, but what if she had to? She would not. I don't know. You think she worried? She guaranteed she would not.
00;12;35;05 - 00;12;54;25
But if it's between getting her our wheels and independence and driving that car, she works. She'll do something different to find a different way. Yeah, but. Oh, really? Really. Do you know Lily? Yeah. There is no way knowing she would drive that car. Or are you facilitating that by saying, You know what I made fair, but I don't want car back and I don't have to deal with it.
00;12;54;25 - 00;13;24;16
Okay. So you do you ultimately. Yeah. No I don't think she would drive it it would be a pain and I fall inside and we have to get rid of it. Don't want to do that. He's had it for 25 so seven years. Yeah. I just want to go lot my play off get gone. But the question I've got is and I've been mulling this over a little bit and I know we've got some time on our side, but she brings it up regularly.
00;13;24;16 - 00;14;04;14
Yeah. Is what you so clearly from our previous experience we don't do that again. Yeah right. So she'll be able to borrow learn to drive in our cars. Yeah. Because that's what we've got. That's all right. And then she can either save up for car herself, but it brought me back to hell. What happened to me? Yeah, So I worked from when I was 14 to when I was 16 almost to the day, because then I joined the bank and I saved three and a half thousand dollars and that this is the part I think he handled really well.
00;14;04;16 - 00;14;30;09
So to to, to his you know, you also he stood by that. Yes. In Exactly. Exactly three and a half thousand dollars. Yes. But he gave me the money. Yes. This is also very good. And he but he wanted me to buy like a safe old ladies Corolla. Corolla here, as if I love the Corolla. I really like.
00;14;30;09 - 00;14;51;00
Sorry. Oh, yeah, I love it. You're so delighted. So we went to the kayaks. He came with me, and I found and fell in love with the barina. And it was like, Oh, come on, Corolla. I remember Raina. You know, I'd be like, Just don't put me in a very little person. I'm sure. So it sort of fit.
00;14;51;02 - 00;15;06;28
And it was blue. I was going to say, What colour is it? It was white, but it was blue on the inside and it was $7,000. So it was in it was exactly the budget and I wanted it. I remember we came home and he was trying to get me to think it over. That would have been a very good car.
00;15;07;00 - 00;15;29;17
It was, yeah, it wasn't very old and it went for years and years and years. Yeah. Anyway, but I once I, he let me decide though maybe he did. I got to decide on the car. Yeah. Yes. And he went and you know because I picked the car out. Yeah. Come home. He still wash it every weekend. Yeah.
00;15;29;17 - 00;15;55;11
And I loved that car. He got me out, I went to parties. I could do whatever I wanted. Um, and it was mine, that feeling of mine. But he helped me out. So. So I'm wondering whether a design. I love it, but can I put. I don't want to tell it, can I? At what time do I tell you that?
00;15;55;16 - 00;16;17;04
Maybe I'll do. Yeah. Okay. Do you reckon that's a good thing? I reckon it's an awesome thing, but I've got to. But because I've heard a story where these people had three kids and they said this and then one of their kids was a really good size six, I didn't have like a massive saver. And they're like, What?
00;16;17;07 - 00;16;34;09
We said this like it did them random. Yeah. Like, yeah. Because then they couldn't find the money, right? So they put in 20 grand. You got to put in 20 grand, right? So you got to know what your kid is doing budget. And if you got three kids, you know, so I would say be careful. Like that's the only thing.
00;16;34;09 - 00;16;56;00
Not for you particularly, but maybe a little. I know, but you could go like, you know, let's stay in contact, you know, what's your savings? Go. And, you know, I'm prepared to match it. I know I feel like having less rules around it is better. I agree. How do you navigate that, though? Because you can also say do this and not do do.
00;16;56;05 - 00;17;13;23
I can't, you know, So I could. Well, you know, but you you put a timeline on you guys are probably in the position where it's fine she can go forward or whatever or timeline. It's just like that. It's like what is the Yeah. The thing because it's always like, put your own oxygen mask on first. You definitely need to do that, right?
00;17;13;23 - 00;17;31;08
For sure. And she's the last one and we're nearly off. But I think that's having the conversation. It's like because we said to Willow, while you're saving for the car, you don't need to pay board. That's what we did. But like, we want you to be putting the money away and like we were like, keeping a bit of like, I hate this.
00;17;31;08 - 00;17;57;02
It was controlling, but it was just like checking in, making sure he was saving or whatever. So it's like, because it's a joint thing. And look, we didn't help him choose the car. That's fine and we didn't contribute it. I think that's good, though, but that's what needs to happen. But it is like if you don't succeed or something's wrong, Yeah, but you've got a financial commitment riding on it as well.
00;17;57;05 - 00;18;18;07
So yeah. So anyway, give me food for thought because you know, she's only or she's 15 and a half, but it could play into whether she decides to work or not. But I don't know control that. But that's okay. Yeah. That's just an offer on the table. Yeah. Hm. And maybe I'll try it later. I had opens out over the next couple of days.
00;18;18;10 - 00;18;41;13
Well, that's cool. Yeah. All right, so I'm just getting into the next segment. I haven't got a clever segue way out of that. And it's about young people can get face time. Yeah, wanting to. That's what I for the first time. Yeah. So couple things going on here like for and you don't have physically have to be a young person buying your first home.
00;18;41;13 - 00;19;04;09
You can be of any age but let's just say that you think it's like quite a while off. Well, first of all, most people like I'm just feeling like this is just the people are despondent. It's like really this. And because our environment is telling us it's really high affordability, it's the worst time in history to buy a house for young people.
00;19;04;09 - 00;19;27;23
Young people can't buy houses or whatever. And, you know, whatever we get fed, you know, people tend to believe these things. Yeah. And and so we might not take action, right? We might think that, yes, I can do it, but it's maybe 3 to 5 years into the future. So I'll just save. Yeah. Or I just will never be able to do it, whatever those deals are.
00;19;27;24 - 00;19;44;16
Yeah. It's like it is. It is for me. It's not for me. I'll never be able to do it or I'll just save. And when the time's right, I'll find out more and what what actions that's causing you to take it. So if you feel really despondent and you never going to do it does just mean you just going to go and spend and, you know, feel bad about yourself.
00;19;44;24 - 00;20;09;16
Oh, maybe you going to stay and enjoy it. That could be good. Or, you know, but what what is what is that feeling that it's giving you is really important because that feeds into our belief system and that feeds out to how we behave and our outcomes. So if you can be really conscious about what thoughts you have on that, yeah, is is a first step.
00;20;09;20 - 00;20;34;17
But then from a financial wellbeing sense, it's really, really important of the practical things you can do is become financially educated. Yeah. And again we sit and we worry or we judge ourselves externally or we're not good enough, or our self-worth and our self esteem and we stay in that feeling rather than going. Getting some sex. Mm hmm.
00;20;34;20 - 00;20;54;21
Sex help us so much to make actual real decisions yet so don't let things be done due to you to that pain. The drive to say, yeah, I want to do things to you and don't let the world tell you you can't have the things you want. But also we might not be able to literally have all the things that we want.
00;20;54;23 - 00;21;30;25
So we need to find out what this fits that idea. Yeah. And I would just say there's a few things about housing, like conceptually, right? Because if you are Australians, we love buying houses, right? It's like the backbone of our culture is buying a house. But then there's the, you know, we could look at the older generations and you know that we're not the same like buying a house in 2026 is different from buying a house in 1975 or 1980 or 1990 or 2000.
00;21;30;26 - 00;21;50;08
You know, like we house prices are more about housing. Buying a house gives you housing stability. And then there's true I think there's two schools of thought Do we buy something within our means and try and pay it off so that one day we have free housing? Yeah. Or do we buy a house that we love but we may never pay it off?
00;21;50;08 - 00;22;09;23
Yeah, right. Both of those things give us housing stability, right. And we can hold on to them. But the second one just has a cost to housing. But you're still more in control of that. You're still got to have a roof over your head no matter what. And that's where the attraction comes in. It's Yeah, and then we are how much do you hear this?
00;22;09;23 - 00;22;38;11
Like renting is wasted money and you're paying somebody else all the time, you know? Yep. Home right off, right? Yeah. So, and like, there's truth in that as well. And I think it comes back to your values and your beliefs for sure. So what do you believe to be true? You know, I am aware that if you are in a house, you know, my parents didn't name their grandparents.
00;22;38;11 - 00;23;06;20
And yeah, so there's probably some, you know, some conversation around that. But then the other thing is what do you really value? Houses tend to give us safety and security or the belief that we are safe and secure. There is a correlation there. Actually, when we bought our house, I thought the roof was going to blow off every time there was a storm.
00;23;06;22 - 00;23;36;15
And then it took me like five years to go. No, the roof is not going to blow off because like, I don't feel safe at all. No, that's like literally safe. Okay. Yeah, because it was ours and we bought it. And, like, things will go wrong for me and, you know, so we have to be different. Yeah, but yes, being able to so in the current market environment in Australia, rental properties, if you're on the rent train it is tough.
00;23;36;17 - 00;24;01;14
It is certainly tough, rent is expensive. Again, that feeling of being in the driver's seat or being done to you, you know, it might not have safety in maybe the landlord says, I'm putting the rent up, maybe the landlord says, I'm sorry, I'm selling. You have to be getting a new rental and lining up and. Yeah, and the concept and maybe liberty of being homeless, having some way to live, right.
00;24;01;19 - 00;24;35;03
Or massively compromising who you live with or where you live. Yeah. And if you've got a family, that's a whole nother ballgame too, right? So really understanding your values and if this is something for you or not, but also like if you joke about if you've got a value of, you know, living life for today, it's just broadly speaking and enjoying, you know, some things because, well, I hear this all the time, too, is that we don't I don't want to be chained to the mortgage.
00;24;35;06 - 00;25;00;19
Yes, Right. So how well does that feel in your value system? Right. Ah, I'm willing to do the yards to have that. It's almost putting your values in party order, you know, to have the safety or I just don't want to leave, you know, even though after all these years of doing banking, finance, mortgages and my experience, I'm just starting to join the dots on how I approach this.
00;25;00;19 - 00;25;37;23
Okay? Because when I we bought the house that we live in when I was 23 and it is it was a big house like this was 18 years ago and at the time it was $650,000, which was like much more than what would been a lot of friends paid for their houses. Yeah, and I did not realise that because I knew that because I was a mortgage broker that the bank was going to lend us the money and we borrowed to the maximum of ability and I we are still paying off this loan, whereas I know other people would have.
00;25;37;26 - 00;26;04;01
And this is where I see young people coming into me today going, I don't want to be overcommitted. I didn't even know that concept. Yeah, I didn't even understand what that meant. Like if you could make the repayments, I thought you would be okay. I didn't have any. Yeah. So if you're considering buying your first home, there's two things that you really need to do.
00;26;04;01 - 00;26;28;09
The financial education component that we talked about is understanding, you know, how much I can borrow, what sort of deposits I need, what government grants are available and now in my lifetime, the best government support is there that I've ever seen. Ever. Yeah. So understanding that you might be close to the peak, right? So the system might be there to support you more than you think.
00;26;28;11 - 00;26;54;26
The other really important part, though, is these sort of questions that we're talking about, understanding your numbers from the inside out, your values, what you willing to sacrifice or not for the now in the future, depending on how forward focussed, choice focussed or now what your lifestyle you want it to be. But you need to understand, you know, because I think some people approach it as like a numbers game and like I don't want to be overcommitted, right?
00;26;54;26 - 00;27;15;13
And I don't want to be a slave to the mortgage. I bought a white picket fence. Yeah, and some people have that dream and I didn't even realise it at the time because when I think about my money story, my belief system, that's just what you had is a nice house. Always had a nice house. Yeah. So I didn't even use it and not having a nice house.
00;27;15;16 - 00;27;51;07
It wasn't even on the cards. Think about this story. Oh, my gosh. That's right. Where I grew up again, linked to Money story is and you know you beliefs that you're born with and your traits and so beliefs that you have through life that I. I would never have gone to the best house. Yeah. Like it was something that was in my means affordable plenty of right now interest rates gone up I'm an analytical like all the things to make sure I was going to be comfortable I didn't have an existing lifestyle was a thing because of paying off that loan quick as I can was really important.
00;27;51;07 - 00;28;11;19
I didn't even have a plan for that. Yeah, you know. Yeah, I suppose I do, you know? Okay. I'm just thinking something for that to be okay that let's just say there's two broad camps of, like the means and the use out there. I think the youths are the ones who are going to be more proactive, go and find the information and do the things.
00;28;11;24 - 00;28;29;19
And then the maze that just like I can't afford it or I can't do it. And that's to sit back yet talk of stuff like because we have this vision of like, well I'll never have that. So I just want the childhood that I had. I can't recreate that. Yeah. Or whatever or Yeah, yeah, yeah I know that.
00;28;29;22 - 00;28;54;20
Yes. So what we were taught when we were young really informs this and then also the messaging that we get. So if you want it, what Darlene was trying to say a bit earlier is around now is actually the most awesome time, if you look at it a particular way to actually get into the housing market. In Victoria, for example, you can buy a house for under $600,000 with no stamp duty and a 5% deposit and no mortgage insurance.
00;28;54;20 - 00;29;16;28
That's right. For $35,000. Exactly. But on Mills point, it might not be your dream place. That's right. It's probably an apartment, a two bedroom, small apartment somewhere in the suburbs. Mm hmm. Mm. So understand your values and your money story and where you've come from and what you actually want and what you're trying to do. That's how you want to live your life is really important.
00;29;17;00 - 00;29;46;00
Yeah. What are those things that are driving you? Can you do it? Probably. Right. Who's telling you that? You can't tell the media because can you save $35,000? You might be listening to this and have $35,000 and had no idea that you could be buying property right now. We see people all the time in our calls, you know, thinking of someone I saw Monday, and she is single, single.
00;29;46;02 - 00;30;11;05
And she has $290,000 and still thinks maybe I can't get in. Yes, that's so true. Never really? Well, because who said that you need to have this giant deposit. And usually the deposit is to avoid mortgage insurance. But now there's the 5% deposit scheme. You can buy a house for up to $950,000 in Melbourne and not pay mortgage insurance.
00;30;11;05 - 00;30;32;05
Right. So you need to learn about this stuff is the point. You need to understand the system, how it works, what are the terminologies? And gosh, Mal and I've said for years and years and years, I just wish people would learn this earlier. If you learn earlier, you can decide early on, right? You can decide whether it's a pathway I want to work towards what I need to do.
00;30;32;12 - 00;30;59;17
You can decide whether this is actually for me or not, and you understand what it would take. If you don't find out that information, then you're just mulling these through, you know, in your body, in your mind, rather than actually learning about it, which can inform you and maybe you can do it and want to do it, or maybe you don't, but actually overlay your feelings with fact.
00;30;59;20 - 00;31;37;02
The other thing is like buying property is like there's a fear of like and, and then timing, like trying to time the market. Right. A really good one. Yeah. So whoa, does this get into the next segment a little bit. Oh, just before we do. So I talk about like if you're looking for some way for shelter and a roof over your head and depending on those values and while you're doing it, it is not just a wealth asset growth, building wealth purchase.
00;31;37;05 - 00;32;04;29
It's a hot buy. I talk a lot about hot buy. This is a head buy. It's not necessarily for an investment. So understanding why you want the how coming back to understanding why you want the house so and chasing a market is never in my eyes a good idea for that like buying when the prices are down unless it means the difference of getting in or not.
00;32;05;01 - 00;32;31;26
But the right time to buy for you is when you're ready. All that internal work and you understand what it takes. And you are, you know, you're you're in the driver's seat and you're making decision to go not about where the market is, you know, and what's going on. You just it's gambling. You can't change the market and you're going to live in a house In the past, prices are going to go up and they're going to go down and the other move around.
00;32;31;28 - 00;32;59;10
That's how the housing works. Yes, but you're in these two living. That's right. Yeah. Yep. It might depend a little bit on your strategy, I suppose. Like what type of house you buy and where and how long you plan on living in it. These are all important considerations, but do things also this because this and we talk about this sometimes is that the way the market is actually dictated by sentiment?
00;32;59;13 - 00;33;32;06
So when like prices are lower and people aren't doing things currently right now because the environment and the media are telling us it's hot and we can't afford to, we will wait basically until things get better and then people will stop making moves. This is not the right attitude. So what we are trying to say is for you to kind of not listen to that noise, understand what's possible, what the numbers are and what you want to do, and keep moving forward like there's no right time other than the right time for you.
00;33;32;07 - 00;34;00;26
Yes. Yes, that's exactly right. So just yes, sentiment is a really important thing. So, you know, interest rates are high at the moment and that's because our inflation is high in this country at the moment. And because of that, it's very beneficial for, you know, the media or the government telling us that things are hard because they want us to slow spending.
00;34;00;28 - 00;34;18;12
They want us to slow down. And it's easier to do that than actually put interest rates up further and make it harder. So if they can do that with fear, then that's actually better for the pockets. And what I mean by that, because if we put the interest rates up further, it might impact on employment and our jobs.
00;34;18;18 - 00;34;41;26
So they don't want to do that either because that puts all of us in a lot of hurt and a lot of pain. So, yeah, so exactly right. Don't try to put the noise out and work on what you want, your journey, why you want it and whether it's possible or not. Do some. Yeah. Financial education so I'll take the team.
00;34;41;26 - 00;35;03;07
See take. Is that the first time journey should start with a plan, not a property search. Yeah. People decide to, you know, they might have talked to family. You know, they've looked at the market, they might have a little bit of knowledge. Sometimes a little bit of knowledge is dangerous without all the facts. Yes. And you just say, okay, going to start looking and finding a house.
00;35;03;11 - 00;35;25;07
Yeah. And I have no idea how to make an offer. What to do with all those things. Yeah. And just jump right. Can I give an example of this kid that had by you saying that it reminds me that I've had speaking to some people and it was like $1,000,000. We have to buy a house for $1,000,000. And so they're doing everything that they need to to buy.
00;35;25;07 - 00;35;45;06
This is their first time buyers buy a house for $1,000,000, which is outside the property price cap. So there was a bit of an education phase of like, let's bring that down to 950 so you can get some more government assistance to help reduce the deposit that you need to get into the House. But like staying very fixated on the type of property first.
00;35;45;06 - 00;36;16;14
So that's what's happening here. It's like we must stay in this area, in this closed, you know, parameters and we must have these things in the property. We know what we need. So like they leading with the property requirement. Yeah. Yeah. This is leading with well, this is what we can afford. This is what makes sense to us, which might have created more openness of location, price type of property.
00;36;16;14 - 00;36;34;01
Yeah. Instead of going knowing this is what we need and then going to find that first, it's that done it the other way, right? Yeah, because you're right. People start, they're like, you've you going to start, you're interested in property. What's the first thing you do you get on real estate often. Yes. Yeah. Right. Is that the first move?
00;36;34;03 - 00;36;57;26
We would actually say no. Find out with that what you want, why you want it, learn about what it would take and you know, and then definitely the next piece is to learn about property prices and what you get for your money and then how much and but you need to work from the inside first to understand where your comfort level is and what you want to do.
00;36;58;02 - 00;37;20;02
Yeah, definitely. And just like I'm just thinking about these same people again, so they, the parameters just keep changing on them. So they were so fixated on the property. Every time we have another conversation about affordability and lending, there is something else that keeps changing their parameters, and then it's like, Oh, we just need to keep saving more.
00;37;20;04 - 00;37;44;18
So it's like there's this push and pull on what we can do, Which then also leads me into lending actually, and loan options and our perception of that, you know, like and what type of loan that you may need as a first home buyer too, because I would recommend that you educate yourself on this pace too, before you hit realestate.com.
00;37;44;18 - 00;38;11;11
Right. Like what? Get your pre-approval ready, you know, find out what type of lender you want. If you're taking out a government grant or scheme place, which is that one called the 5% deposit scheme, which means that you can come in with a 5% deposit and the Government guarantees you a loan so you don't pay mortgage insurance, it just saves you some money and that you have to participate with one of those lenders, right?
00;38;11;11 - 00;38;31;10
So you have competitive rates. They do, but you have to choose one of those. But when you choose one of those banks. You have to stay with that bank for the standing because you can't then just go and refinance to another bank once you're in to get a better loan, for example, without triggering the mortgage insurance cost. That's right.
00;38;31;10 - 00;38;50;20
So I've got an example of that playing out where I've got a client at the moment. So boarding to the scheme, that's fine. A single person and then a few years down the track has now got a partner and they want to buy a home together. But it makes sense because like what he had an apartment do, he would like to keep that apartment rented out.
00;38;50;24 - 00;39;21;01
Yes. The problem is exactly this. You can't stay on scheme. Once you rented it, once you rented it, you must be living in it. Right. So that knowledge, your information or understanding, because now that impacts the way forward for the future. So an idea of a plan if you're able to afford a plan which is best is yet but if we understood that to begin with that might have changed like that know to today in decisions or how much I save or I have to get that loan down too.
00;39;21;01 - 00;39;41;10
So I'm in more. I've got more flexibility and choice of keeping that property and getting it off the scheme, gathering it, taking a deposit away from my future purchase, that might have changed my saving behaviour is what I'm saying. But also, yeah, so it changes how you would have approached the loan in the first place. The property purchase.
00;39;41;10 - 00;40;00;08
Yes. And so that's the other thing too. So once you've got this, I just think it's so important because you know your approach first before and then you can go and find the right property that matches it versus the other way around it. And understanding all the pros and the cons and the what if scenarios, that's contingency planning.
00;40;00;08 - 00;40;23;05
Yes. What would I do if I can't afford? I buy under the scheme? And what if I can't afford the repayments on my own and I decide to move back One of my contingency plans? I can move back in with family, but then I'm running it out in a cost down scheme. Yeah. So, you know, understanding then maybe you need that to have two bedroom apartment and get a border in right.
00;40;23;07 - 00;40;45;28
So what are you really exploring? Contingency planning. But that is about planning and huge. You know, education and planning can happen years before you actually go down that path. Yes. So thinking about another client we have that always had the dream very young of always wanting your own place. Yeah. And she did it. And she's done it along the way and upgraded and done all those things.
00;40;46;01 - 00;41;08;12
But she was an example of coming early and educating yourself and taking her time and a long period of time before doing it. This also makes me think too, that in Australia, our culture, like we are just people to solve our problems for us. Like we go to a finance professional, maybe we go to the bank or a mortgage broker, they tell us how much we can borrow.
00;41;08;18 - 00;41;26;15
We assume they're doing the right thing and then we just go and do it right. We assume that they bring that back, right? Yeah, But you know, all of the list of things that we've wrote off that actually matter to us, that will have an impact yet have they even been discussed? Right. And whose interests are they serving theirs or yours?
00;41;26;15 - 00;41;47;08
You know, are they just giving you a loan or are you taking out the loan that actually makes sense. Have you asked enough questions? Are you comfortable with this? And I think that's another reason why we don't do anything, because we don't trust the finance industry. I think that can be real barrier, you know, but understanding and articulating your short term goals, you medium your long term goals.
00;41;47;08 - 00;42;13;15
They don't have to be set in stone. It doesn't have to be that at all. But any of that information can be really helpful to get, you know, on the right track. So we go like right down your list. It might sound stupid questions, right? Like really silly stuff like that we've just talked about. You wouldn't feel confident to ask a mortgage broker, but literally you should be going in there and asking all of your stupid questions and they should be answering them for you.
00;42;13;21 - 00;42;39;00
That's right. What does the next five years look like? Do I need offset accounts? How do they work? What's this product you know, Is it, you know, going to serve me? Definitely. And I reckon one of the biggest barriers of not getting financial education sooner. And that can come from your own online research. Talking to experts like a mortgage broker early is because you feel that they're going to try and sell you sooner than you're ready.
00;42;39;05 - 00;42;59;27
Yes. And you might feel stupid if you're not ready, I reckon. My gut tells me they. The two common ones. Yes. Yes. I was going to say, working in this industry for so long, you a lot of people don't want to talk to you unless you already brought the finance people. Yeah. So your belief system around that, they don't want to sell anything.
00;42;59;28 - 00;43;20;01
I'm not ready to sell them or I don't want to annoy them and take their time. I want to work in radio. And by the way, not for you, not your people, not your people. This is your journey to all. You become educated and in the driver's seat of your journey, the better outcomes you will have. Be courageous, be bold, get the information you need.
00;43;20;01 - 00;43;43;06
If you don't get the information, find it elsewhere. That's right. Move on. Yes. Because your friends love that person. Doesn't mean you got to love that person, correct? Yeah. And don't outsource it, you know, really make those choices and decisions for yourself. Yeah. And that's being inquisitive questions, you know, lots and lots of asking. Right. Where you need to distrust the process.
00;43;43;06 - 00;44;04;02
Yep. Cool. Thank them. That's our episode for today. So for your first home buyer, we hope that you feel empowered to do something, find some information, go and find the right professional that's going to help you take that next step. Even if it's five years away from today, doesn't matter. Go get your information now. Go get your plan.
00;44;04;04 - 00;44;30;00
Then make a plan. That's it. All right. So next time at The Money Collective, we provide Financial Wellbeing, premium coaching, mortgage broking and workplace financial wellbeing programs, which we couldn't do without the seamless support of that fabulous team. If you'd like to find out more, head to the Money collective secondary here or our socials to take action and engage our services in our Facebook group, join the conversation and help us break down the taboo around money.
00;44;30;02 - 00;44;38;26
All content in this podcast is for educational purposes only and is generally nature for tailored personal advice. Please seek out a professional.
This podcast provides general advice only. It does not take into account your objectives, financial situation or needs. Before acting on any information provided, you should consider the appropriateness of the information and the nature of the financial product in regards to your objectives, financial situation and needs. We recommend discussing your personal situation with a financial professional.
Podcast by:
MEL PEARCE & DARLENE NEU
Co-Founders, Financial Wellbeing Coaches and Mortgage Brokers
The Money Collective
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